WASHINGTON — Comptroller of the Currency Thomas Curry on Wednesday expressed support for community development financial institutions, arguing they were an important part of the industry, even as the Trump administration is seeking to cut all government funding for them.
Though Curry did not refer to the administration's budget plan, he spoke out on the need for CDFI banks.
“Our nation and economy are stronger when [Minority Depository Institutions] and CDFI banks are a healthy, vibrant part of our financial services industry,” Curry said in prepared remarks for a conference in Los Angeles honoring such institutions.
“Diversity is critical in the ability of the banking sector to adapt to the needs of a diverse nation," Curry said. "A one-size-fits-all approach will not produce the kinds of innovation and responsiveness to customer needs that are necessary for our efforts to be successful.”
The Trump administration first suggested cutting funding for CDFIs in its budget proposal released last month. The program was also included in a spreadsheet sent to Hill appropriations committees last week, listing specific budget cuts the administration wishes to make. It estimated that eliminating government funding for the CDFIs would save $210 million.
Curry's term expires Sunday, but he is expected to stay on until a successor is confirmed. During his speech, he expressed hope about the program.
“I am optimistic about the future of MDIs and CDFIs,” Curry said.
The Cleveland-based bank is projecting steady growth in net interest income even as credit losses remain manageable. But Chairman and CEO Chris Gorman also said that he thinks a recession is likely.
The first-quarter increase involved commercial real estate loans, including some problematic multifamily loans and an office credit, but none of the criticized loans were to consumers, officials at the Dallas company say. Further CRE deterioration is anticipated.
The Detroit-based company is exploring ways to make more consumer auto loans without running afoul of stricter capital standards that are expected from the Federal Reserve. Possible approaches include more securitizations and the use of credit risk transfers.
The House Financial Services Committee also sent to the full House two bipartisan bills, including one that would prevent large banks from opting out of having to recognize Accumulated Other Comprehensive Income in regulatory capital.
Charge-offs and nonperforming loans rose at the Georgia bank in the first quarter. But it blamed the problem on one large client and said the matter has been resolved.
Amid healthy first-quarter loan growth and improving credit quality, Discover Financial Services slashed its profits by $800 million to offset remediation costs from a 16-year period when it overcharged certain merchants.